Donors commit $5.9 billion for Indonesia
Donors commit $5.9 billion for Indonesia
PARIS (Agencies): Donor countries and institutions on Wednesday pledged US$5.9 billion of assistance for Indonesia this year but stressed the need for continued economic reform, a smooth political transition and a stepped-up fight against corruption.
The aid, to shore up Indonesia's 1999 budget and bolster the government's efforts to pull the economy out of recession, was announced by the World Bank after a meeting with around 30 donor countries and institutions at the World Bank's Paris office.
"Indonesia's donors delivered a strong message today with a pledge of $5.9 billion in foreign assistance for Indonesia for fiscal year 1999/2000, in support of Indonesia's staying the course of economic reform, continuing to protect the poor, and stepping up the fight against corruption," the World Bank said in a statement.
The World Bank, which hosted the meeting here, had called on both the Indonesian government and donors to "stay the course" on political and economic reform underway.
The donors also stressed the need for Indonesia to complete "political transition", including a successful holding of a referendum on self-determination for East Timor next month.
"We must not become complacent," warned Sven Sandstrom, the World Bank managing director who chaired the Paris meeting.
The Indonesian government needs to "persevere and continue to make good decisions in politically difficult times," he added.
The sum pledged was in line with Indonesia's earlier expectations of $5.5 billion to $6.0 billion. It compares with the $7.9 billion pledged - and the $6.2 billion actually handed out - at the previous donors' meeting last year.
Sandstrom said there is no link of any "flow of resources" to the planned referendum in the disputed territory of East Timor. Donors are working on the assumption the referendum will go ahead next month in a free and fair manner.
Indonesian Coordinating Minister of Economy and Finance Ginandjar Kartasasmita said the economy is on the road to recovery after its economic meltdown.
But, he added, "a return to the pre-crisis days of high growth and accelerated poverty reduction is still far from assured" and continued support from the international community was vital.
Ginandjar promised at the meeting that the government would forge ahead unflinchingly with deep-rooted political and economic reforms.
Indonesia was told during the talks that it could count on continued financial support as long as it continued to root out corruption, overhaul its banking and corporate system and work on democracy following June's parliamentary election.
Ginandjar said the next consultative group meeting will take place in January and will discuss Indonesia's external financial requirements for the 2000/2001 fiscal year. The government will likely seek assistance of less than $5.9 billion.
Japan
In a related development, Japan announced in Jakarta on Wednesday afternoon that its delegation at the meeting in Paris pledged a total $1.67 billion in new aid consisting of loans and grants.
Kaoru Shimazaki, economic counselor at the Japanese embassy in Jakarta, told reporters Japan was committed to supporting Indonesia's economic recovery program but also asked the (Indonesian) government to work harder to restore international confidence.
"Indonesia needs to maintain its current political and economic reform measures, especially the promotion of more democratic and good governance and implemention of projects in effective and transparent manner," Shimazaki told a news conference.
Shimazaki said Japan's assistance consisted of 188 billion Japanese yen ($1.57 billion) in loans and grants under the Official Development Assistance (ODA) program and another 12 billion yen ($100 million) in loans from Japan's Exim Bank.
He said the $1.57 billion aid under the ODA program included $600 million in Social Safety Net Adjustment Loan, $830 million in pipeline disbursement allocated for health and nutrition program and ongoing projects and $142 million in grant and technical assistance.
"Japan will continuously support the social safety net program to help socially vulnerable people.. and to ensure that assistance from various donors, including Japan, will be used for targeted people," Shimazaki said.
The $100 million loan from Exim Bank was specifically earmarked as the Second Policy Reform Support Loan funds to support Indonesia in improving its governance and administrative ability, he said.
Shimazaki said Japan intended to continue to provide as much assistance as possible to the new government of Indonesia.
He said, however, Japan has yet to make estimates on its new aid commitments to Indonesia for the 2000/2001 fiscal year. (cst)